I think nobody really knows for certain... I plan to batch-resize the images I want on my iPad to 1024 on the long side, and will sync the iPad with that directory structure. I'm hoping that this will leave me with a decent looking image on the screen. however, I'll lose any ability to zoom-in for more detail. But, I rarely need to do that on the iPad anyway. I see the iPad as a photo viewer, not an editor or analyzer...
I'm working off a PC... and do all my image management with photoshop & lightroom, so I have no idea how iPhoto works. After I've edited images from a particular shoot, I have an action that exports properly-sized images to the directory I sync with (and/or creates a new directory/folder when appropriate).